Beware of the "Bait & Switch" Video Game Party

I have been in the video game industry for four years now and everyday I still hear or see things that amaze me from other business owners.  When I first started in this industry there were only a small amount of people who did video game parties nationwide and since then it has grown into quite an busy market coast to coast.

I came from the US military after 14 years of honorable service, three tours in the Middle East, and year tours in Korea & Afghanistan and I entered into the sales & marketing field right away.  The vast contrast of the two professional segments were immediately evident whereas the military we taught core values such as integrity, service, & excellence the sales world believed that any means necessary to close a deal is on the table.  

I personally had more success than my sales peers because I applied an approach more like my military background than the sales managers' examples I saw.  I was lucky enough to have a strong background in leadership after serving as a Senior Non-Commissioned Officer and leading troops for years so I did not fall into the bad habits that many other sales people chose as an easier option.  This allowed me to rise to the top of several organizations, including being the #1 salesperson in the video game party industry in terms of volume per month & #2 in terms of average events per video game truck owned (#1 had one unit versus 4-5 we operated).

I am sure you are thinking "what does this have to do with video game parties" and so I will explain it to you.  Since joining this industry I have encountered some of the most cutthroat salespeople that I have seen in any industry.  I have been the director for large call centers with 100 or so salespeople on the floor and in any industry from door to door sales, home improvement, technology, etc where the poor ethics of sales was preached daily.  

I joined the children's party industry naively thinking that because we were dealing with kids parties the ethics would be at a higher standard - boy was I wrong.  The truth is that when it comes to money people will say and do anything to win business no matter the industry.  I have experienced this firsthand as I receive frustrated phone calls from people shopping for the right party for their child's big birthday only to hear about the unprofessional things other video game truck companies  or other party planners will say about their competitors.  

I can only speak for the specifics on what I have been a part of but I have heard anything from video game truck companies telling people that competitors are out of business, the other companies steal credit card numbers, other companies are criminals to blatant fabricated stories about poor service, poor equipment, or even that I (yeah I mean me) work for their company - seriously this happens once or twice a week - just to try to close a  deal.

The point of this blog is that you have to do your due diligence for birthday parties just like any other purchase so you make the right choice for yourself.  Also if you are naive enough to believe information a competitor gives about another company then you have have to live with your decision because integrity is ingrained in the fabric of the people which will shine through in their service - good or bad.

Video game parties come in a variety of levels of service and selection but there is one absolute factor that is fairly constant - operating costs.  This relates to the price you will pay for you video game party because there is a bottom line that a business has to stay above in order to be around when your party date arrives.  

If a company is offering a super low rate then there are two rational conclusions you can reach:

1. They are desperate for business
2. There are strings attached

Conclusion 1 is the most common reason that you will see the ridiculously low rates for parties, and by this I mean anything under $300.  I see a lot of guys jump into this business believing that salesperson who sold them the game truck that this will "sell itself" and that it is a lucrative business.  Most will find out really quickly that nothing will sell itself  including free gold bars the secret to success is dedication and 80+ hours per week.  

The first thing most of these new owners will realize is that it takes a lot more to run this business than they first thought.  The next logical step for most will be to become the lowest cost provider in the industry which will be a recipe for closing the door longterm - but hey some people like hobby businesses that are not profitable.  There are exceptions to this rule of course for factors like sales on slow days of the week where a company may be not getting any business or like rational reasons.  However, the most common rates that are bad business decisions are the companies that are addicted to deal sites like Groupon, Living Social, etc.  

These sites sprang into the marketplace several years back and the aggressive sales approach lured many business owners into a relationship that most would find was a Trojan Horse for their business.  In fact, if you do a little research you will see it is a business model in turmoil as there are many issues with Groupon's reporting of profitability which led to the firing of key executives several months back.  


The deal is excellent for the customer because they receive a coupon that is 50% off or more from the actual cost of a product or service.  What most people do not realize is that the business only receives 50% of the paid amount, minus the deal site taking all credit card processing fees out of the sales (yes they pay their bills at the expense of small businesses).  In the end, the business owner receives only 25% or less than the value of the product or service purchased.  

So a company offering a deal for $200 would have a make out something like this:  $200 (coupon) - $100 (deal site commission) - $5 (credit fee) - $50 (fuel average) - $50 (labor average) = $-5 

Now say that deal sold 100 coupons so the overall loss for the service provider is $-500
but the company has to service 100 events, meaning a full schedule, and no chance of making money for the next 2-3 months.  This means that company will probably have to run a deal again to get capital to stay in business, or pay out of pocket to stay open.  Most have no choice but to run a new deal.

The key to this business model in case you are wondering is non-redemption of the coupons.  Yes, Groupon & Living Social sell business owners on the fact that statistically people redeem a certain percent of the coupons so it is like free money.  I have dealt directly with Groupon headquarters on national deals for millions of dollars in a single month and that was our hope at least.

There is no business owner that would sanely enter into a contract with anyone who pitched to them that they would fulfill 100% of the operations, cover the credit card bill, and then only make 25% of the revenue for their service, which by the way in the end you will make $-5 per event and your schedule is full for the next three months.  The introduction to the television series "Bar Rescue" states  that every year 6500 bars close the doors due to non-solvency and any video game truck company that is offering these deals will be at statistic similar to this.  So the "bait & switch" in this case is that the business may not be around if you support it only through deal site coupons. 

Conclusion 2 is the real "bait & switch" issue that I have seen grow over the last 12 months.  There are a lot of video game truck owners who are jumping into this industry from other types of sales jobs bringing the trick & tactics of their profession.  I see ads running by these owners coast to coast something like this "$99 for 2-hour video game party".  I personally could not figure out the numbers because if you break it down to only fuel and labor costs then you would make: $99 - $50 (fuel average) - $50 (labor average) = $-1…not a sound business model for a long term business.

What I have found is that these "specials" come with strings attached where you end up paying nearly regular price and in some case you will pay a lot more than this seemingly great offer.  The catch for many companies is that, yes the video game party does cost you only $99 but you are required to also purchase a minimum amount of other services to receive the discount.  Additionally, the most common method for making up the difference is a popular fuel surcharge where the cost may increase by as much as $100+.  One customer called me after dealing with this and her quoted deal ended up being over $1200 for a $200 video game party coupon.

These types of deals are misleading and do not represent a business with integrity.  Game Cave Atlanta has made it a standard to not advertise a set price because all of our parties are custom created due to our abundant amount of add-ons that you can include for your party - cakes, food, bounce houses, catering, etc.  Once we know what you want then we can accurately give you the price without misleading you with a supposedly excellent price for a service but one that is never intended to be honored in the long run.

In conclusion, I sincerely hope that this information will help you to better decide the type of services that are best for your son or daughter's big day.  We would love to be the centerpiece of your party and help ease the burden of making the plans come together.  I feel that we are the most qualified in terms of reputation and options that we can accommodate any party.  I understand that some people are Coke loyalists while others are Pepsi loyalists but if you are looking for the best in terms of how much we put into making each video game party the best possible it can be then please feel free to call us anytime.

Good luck to you in your search for the perfect party.